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Board Of Commissioners

City of Henderson, Kentucky

NOTICE OF WORK SESSION Tuesday, February 18, 2020

February 13, 2020

Commissioner Patti Bugg Commissioner X R. Royster, III Commissioner Bradley S. Staton Commissioner Austin P. Vowels

Dear Board Members:

The regular work session is scheduled for 5:30 p.m. (or immediately following the special called meeting of the Board of Commissioners, whichever is

later) on Tuesday, February 18, 2020, in the 3rd Floor Assembly Room of the Municipal Center. The items on the agenda for review are as follows:

A G E N D A

1. Roll Call 2. Mid-Year Fiscal 2020 Budget Review 3. Adjournment

Tagged Passions:budget

Respectfully,

______________________________ Steve Austin, Mayor

A copy of the foregoing notice received and service thereof waived this 18th day of February, 2020.

__________________________________ Commissioner Patti Bugg

__________________________________ Commissioner X R. Royster, III

__________________________________ Commissioner Austin P. Vowels

__________________________________ Commissioner Bradley S. Staton

City Commission Memorandum 20-17

Tagged Passions:boards and commissions

February 13, 2020

TO:

FROM:

Mayor Steve Austin and the Board of Cornmissioners

Williarn L. ?Buzzy? Newrnan, Jr., City Manager ,,m SUBJECT: Work Session Agenda

Tagged Passions:administrator and manager

The regular work session is scheduled for 5:30 p.m. (or immediately following the special called meeting of the Board of Commissioners, whichever is

later) on Tuesday, February 18, 2020, in the 3rd Floor Assembly Room of the Municipal Center. The items on the agenda for review are as follows:

Mid-Year Budget Review

Tagged Passions:budget

Finance Department Memorandum 20-02, with attachments, from Robert Gunter, Finance Director is attached for review.

Tagged Passions:finance

The documents detail revenue, adjusted expenditures, and encumbrances for the General Fund through December for the years of 2014, 2015, 2016, 2017,

2018 and 2019 and tax revenue, personnel expenses, transfers, cash summaries and summary of expenditures for all funds as of December 31, 2019.
Tagged Passions:funding, taxes, Taxes, and personnel

Also included in the memorandum are proposed amendments to the Fiscal Year 2020 budget. Staff members will be present to answer any questions you may

have.
Tagged Passions:budget

C: Robert Gunter

FINANCE DEPARTMENT MEMORANDUM 20 - 02 Revised

Tagged Passions:finance

February 6, 2020

TO: William Newman, Jr., City Manager

Tagged Passions:administrator and manager

FROM: Robert Gunter, Finance Director

Tagged Passions:finance

SUBJECT: Mid-year Budget Review

Tagged Passions:budget

The following charts show the revenue (including transfers in), expenditures (including transfers out), and net for the General Fund through December

31st for years 2014-2019.

General Fund Revenue, Expenditures, and Net Income (in thousands)

920,000

5is,ooo

910,000

95,000

S- Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19

:mRevenue 15,695 16,290 16,619 16,323 16,757 17,460 mExpenditures 12,651 12,954 13,582 13,553 14,599 15,846 -.'Net 3,044 3,336 3,037 2,770 2,159

1,614

Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 W Revenue 15,695 16,290 16,619 16,323 16,757 17,460 m Expenditures 12,651 12,954 13,582 13,553 14,599

15,846 -. ' Net 3,044 3,336 3,037 2,770 2,159 1,614

General Fund Revenue, Expenditures, and Net Income (in thousands)

S20,000 - 9xs,ooo - 9is,ooo -914,000 -912,000 - 910,000 - 58,000 - 96,000 - 9<,ooo - 92,000- -' -' - -='= -- -S- -

I Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 ' Dec-19 -Revenue 15,695 16,290 16,619 16,323 16,757 17,460

-Expenditures 12,651 12,954 13,582 13,553 14,599 15,846 -Net s.3,o= l=l 3,336 3,037 2,770 2,159 1,614

'-

' -' ' -'a - ' a' -aai'4i -- '- ' -..7ll'7

l Dec-14 Dec-15 Dec-16 Dec-17 Dec-18 ' Dec-19 Revenue 15,695 16,290 16,619 16,323 16,757 17,460 Expenditures 12,651 12,954 13,582 13,553 14,599

15,846

-Net 3,044 3,336 3,037 2,770 2,159 1,614

William Newman, Jr., City Manager Mid-year Budget Review February 6, 2020 Page 2

Tagged Passions:budget, administrator, and manager

REVENUE (IN THOUSANDS)

517,600

S17,400

S17,200

S17,000

S16,800

S16,600

S16,400

S16,200

S16,000

5is,soo

S15,600

,

,???

2015 2016 2017 2018 2019

l]

l

l

//' a'

Ai 'i

t:hx [- IIUNms rU l I[- q E5 i Jli U Q [i [ '

William Newman, Jr., City Manager Mid-year Budget Review February 6, 2020 Page 3

Tagged Passions:budget, administrator, and manager

Net Revenue over Expenditures (in thouands)

4

S3,336 S3,037

S2,770

52,158? [?

2015 2016 2017 2018 2019

GENERAL FUND BALANCE as of Oecemkier 31

S17,000,000

S15,000,000

S13,000,000 S14,117,735

Sll,ooo,ooo

S14,564,103

S13,675,1458 S12,360,736>

S9,000,000 SI0,589,382

S7,000,000

S5,000,000 2015 2016 2017 2018 2019

William Newman, Jr., City Manager Mid-year Budget Review February 6, 2020 Page 4

Tagged Passions:budget, administrator, and manager

OF FUND BALANCE FOR NEXT FISCAL BUDGET WITH GOAL OF 25

Tagged Passions:budget

50.0

45.0

40.0

35.0

30.O

25.0

20.0

15.0

10.O

5.O

0.0

2015 2016 2017 2018 2019 2020

m

/ 44.1

T

42.5 43.8

] 38.O

34.4

FISCAL 2020 vs. FISCAL 2019

17,470,027 16,757,434

1,624,278 2,158,775 i il t

i NET i

(14,598,659)(15,845,749)

REVENUE EXPENDITURES

s 12/31/2019 s 12/31/2018

William Newman, Jr., City Manager Mid-year Budget Review February 6, 2020 Page s

Tagged Passions:budget, administrator, and manager

The first spreadsheet below shows that as of December 2019, the General Fund had revenue over expenditures in the amount of 1,614,278. For the

December 2018 period, the net gain was 2,158,775. This equates to a decrease of 534,497 from the prior year. The spreadsheet also shows a recap of the variances between the major categories for the two years. There are some adjustments to these numbers that will explain the differences.

Taxes

Tagged Passions:taxes and Taxes

Service Fees F re S Licenses

Tagged Passions:impact fee and license

Rents

Sale of Property/Copies Other Transfers

Tagged Passions:sale and property

Total Revenue

Personnel Services

Tagged Passions:personnel and services

Supplies Maintenance

Services

Tagged Passions:services

Sundiy Capital Outfiy Transfers

Total Expenditures

s

12/31/2018 14,475,454

212,554 13,420 l 7,997 66,332 13,461

1,949,062 9,154

16,757,434 9,031,169

374,212 483,428

1,686,280 267,794 21 7,776

2,538,000 14,598,659

12/31/2019

14,657,369 193,023 20,455

22,106 51,147

129,424 2,390,681

5,822 l 7,470,027

9,944,968 353,017 403,001

1,440,691 403,754 770,3 18

2,530,000 15,845,749

Variance

181,915 (19,531)

7,035 4,109

(15,185) 115,963 441,619

(3,332) 712,593

(913,799) 21,195 80,427

245,589 (135,960) (552,542)

8,000 (1,247,090)

Net 2,158,775 1,624,278 (534,497)

The spreadsheet below shows the actual revenue and expenditures as of December 31st versus the fiscal 2020 budget.

Tagged Passions:budget

Taxes

Tagged Passions:taxes and Taxes

Service Fees Fines

Tagged Passions:impact fee

Licenses

Tagged Passions:license

Rents

Sale of Property/Copies Other

Tagged Passions:sale and property

Transfers

Total Revenue

Personnel Services

Tagged Passions:personnel and services

Suppues Maintenance

Services

Tagged Passions:services

Sundry Capital Outlay Transfers

Total Expenditures

Net

12/31/2019 Actual

14,657,369 193,023 20,455 22,106 51,147

129,424 2,390,681

5,822 17,470,027

9,944,968 353,017 403,001

1,440,691 403,754 770,3 18

2,530,000 15,845,749

1,624,278

Fiscal 2020

Budget 25,461,000

Tagged Passions:budget

495,600 26,500 79,500 97,500 21,000

3,793,900

29,975,000

19,966,000 870,800 935,900

3,071,720 608,180 783,400

4,579,000 30,815,000

(840,000)

Percentagc of Budget

Tagged Passions:budget

57.6

38.9

77.2 27.8

52.5

616.3

63.O N/A

58.3

49.8

40.5

43 . l

46.9

66.4 98.3

55.3

51.4

William Newman, Jr., City Manager Mid-year Budget Review February 6, 2020 Page 6

Tagged Passions:budget, administrator, and manager

As reflected below, for December 31, 2019 the total tax revenue for the General Fund increased by 181,915 or 1 .3 from the prior year. Property tax

collections were lower in fiscal year 2020 with 93.5 of all current property taxes that were billed collected by year-end. At December 31, 2018, 94.2 of all current property taxes were collected and at December 31, 2017, 92.9 of the property taxes were collected.
Tagged Passions:taxes, Taxes, property, and property tax

The omitted property tax is received from the State of Kentucky for property that was not listed for taxation by the property owners. The amount

varies from year to year and is difficult to budget. As you can see below, we received a smaller payment in the first half of this fiscal year compared to the prior year. The franchise taxes were down 29,308 or 8.4 . We are monitoring this tax and feel it is just a timing issue with one or two entities being slow on their payments.
Tagged Passions:budget, taxes, Taxes, property, and property tax

The insurance premium tax saw a nice increase from the prior year with collections up 117,202 or 4.5 . Net of refunds and rebates, the payroll/net

profit tax collections were down 75,000 or 2.3 from the prior year. The prior year included 46,236 in fees paid by the County to administer their tax program. With that adjustment, occupational taxes were still down 28,764. The bank deposit tax was up: 5,846 or 3.7 .
Tagged Passions:impact fee, taxes, Taxes, program, and insurance

General Fund

12/31/17 12/31/18 12/31/19

Increase

(Decrease) '18 vs '19

Current Vehicle

Property TaxDiscount Ornitted Tax

Tagged Passions:taxes, Taxes, and property

Delinquent Penalty Interest TaxRefunds/Clearing

Tagged Passions:penalty

Property Taxes

Tagged Passions:taxes, Taxes, property, and property tax

Insurance Premium Tax

Tagged Passions:taxes, Taxes, and insurance

6,368,657 242,584 (58,624)

42,786 8,376

23,036

6,626,815

2,498,922

6,441657 243,161 (58,531) 94,887 33,646

6,200 (3,338)

6,763,682

2,594,100

6,665,001 243,529 (60,809) 10,018 53,472 10,409 5,237

217,344 368

(2,278) (84,869) 19,826 4,209 8,575

6,926,857 163,175

2,711,302 117,202

3.4

O.2 3.9

N/A

58.9

67.9

-256.9

2.4

4.5

Payroll/Net Profits Tax

Tagged Passions:taxes and Taxes

Payment In Ijeu of Tax

Tagged Passions:taxes and Taxes

3,124,819

1,322,366

3,289,743 1,322,366

3,214,743 (75,000) 1,322,366

-23

O.O

Franchise Tax 535,676 348,811 319,503 (29,308) -8.4 Bank Deposit Tax 160,194 156,752 162,598 5,846 3.7 General Fund Total 14,268,792 ?4,475,454

14,657,369 181,915 13
Tagged Passions:taxes and Taxes

William Newman, Jr., City Manager Mid-year Budget Review February 6, 2020 Page 7

Tagged Passions:budget, administrator, and manager

The chart below reflects the payroll tax receipts for the past four fiscal years. The trailing twelve-month payroll tax collections were 6,272,301

which is an improvement of 8,113 from the 6,264J88 reported over the same time last year. The Kentucky Office of Employment and Training estimated that the unemployment rate for Henderson County increased slightly from 3.5 in December 2018 to 3.7 in December 2019. It was also estimated that the number of employed increased by 32 over the same time period.
Tagged Passions:taxes, Taxes, employment, training, and trails

Unemployment RateTime Period Ialxir Force .Employed

For Henderson County Source: KY Office of Emp loy ment and Training: Local Area Unemp loyment Statistics (LAUS)

Tagged Passions:training

Unemployed

Payroll Tax Receipts850,000 -750,000 - 650,000

Tagged Passions:taxes and Taxes

550,000 -4-Dec-16 -4-Dec-17

450,000 - -' Dec-18


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